AI-Driven Brands to Reap the Rewards of Rising Ad Spend

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With advertising budgets rising, personalisation is crucial to building meaningful partnerships. Advertisers are turning to artificial intelligence to bring context to their data, which Julian Kramer says is the future for success.

Advertising spend has exploded over the past decade. In the UK alone, ad spend has risen for eight years running. This shows no sign of slowing down, with a record high of £22.7 billion reached at the end of 2017. Investment is mostly focused on digital channels, with German brands already directing nearly 32% of their ad spend to digital audiences, and France expected to reach similar levels by 2021.

This increased investment comes in the face of challenging economic conditions and changing audience habits. In this climate, European performance marketers are doing all they can to secure their companies’ market share by delivering the highest quality digital experiences.

However, many of these brands are throwing too much of their investment away. The appeal of high-volume, low-cost marketing has created a sea of noise, overwhelming customers with too much choice and testing their patience with irrelevant content or experiences.

Duracell’s head of digital, Jon Ones, spoke to this point at Adobe Summit earlier this year. He argued that because brands outsource much of their digital advertising, it’s near impossible to avoid overlaps in reach or wasted KPIs because external parties tend to define their own success criteria.

A rising need for relevance and context

Personalisation is crucial to building meaningful relationships with customers. Across Europe, 89% agree it is important to the success of their business. Yet just 31% feel they deliver an ideal level of personalisation to their customers.

Many companies still struggle to deliver personalised experiences at scale because they don’t have a grip of two things: data and context. Being able to analyse and process the deluge of customer data you hold is the foundation to delivering tailored digital experiences, however, you can’t do this without having the right technologies in place. Indeed, nearly two thirds (60%) of brands feel they collect too much data from too many sources, making it impossible to analyse and draw insight from this sea of information.

The result is that brands are forced to attempt personalisation without a complete understanding of their audience, and without the context required to see what people's’ behaviour really says about their preferences. This explains why our Facebook feeds and the websites we visit serve up ads for products we’ve already bought, or why Amazon shows up product recommendations based on someone else’s tastes because they borrowed our device once upon a time.

Anticipating customer needs with AI

Customers expect brands to understand them inside out. To “get” them and know exactly what they are looking for and when. This takes more than access to data and educated guesswork. It takes enough context to understand what this data really says about a person.

That is why artificial intelligence (AI) is gaining serious momentum. It allows companies to analyse and act on more data faster, which is the key to delivering genuine and measurable personalisation at scale. According to research by Adobe, two-thirds (66%) of companies in Europe plan to be using AI for business and customer analytics by the end of 2019, and 88% expect to be doing so by the end of 2020.

Some organisations are paving the way. Though it already commands more than 80% of Switzerland’s telecoms market, Swisscom continues to look for ways to personalise experiences for its digital audience. The company recently added AI-enabled targeting and allocation features to its web and mobile sites, allowing it to automatically roll-out, test, and optimise new services based on real-time customer data. AI also becomes more accurate over time, which means Swisscom can fine-tune its service for each customer and build long term loyalty with them on an individual level.

This last point is crucial in today’s digital environment. Customers are not just spoilt for choice, they are overwhelmed by it. At best, poorly targeted or irrelevant campaigns go unnoticed. At worst, they risk alienating people who have no patience for brands that clearly don’t understand what they want.

Serving a selective attention span

There’s an important difference between mass personalisation and personalisation at scale. The former involves reaching as many people as possible and hoping they might be interested. The latter involves tailoring experiences to the individual needs of many people at once. This is the path to experiences that resonate with multiple audiences – and AI will help us get there.

Too often, targeting feels like robots fighting for our attention, and this can indeed be in the case of simple programmatic advertising. In 2019, when customers are striving to stay sane in a deluge of digital content, they need to be more selective about what they consume. Indeed, 46% say they feel overwhelmed by choice, and nearly 60% would happily buy from an unknown brand that can deliver a better overall experience. This extends from an initial advertisement or campaign through to the product or service they purchase, demonstrating the impact that AI-driven personalisation can have on an organisation’s bottom line.

All this reinforces the importance of bringing context to the customer experience. The key to personalisation is the same whether dealing with someone in person or on digital channels. Listen to your audience, understand their needs, and deliver on those needs. Context is the all-important link between understanding people and delivering what they want, and brands are betting big on AI to bring this much-needed context to their data. This will help them to make the most of their ad spend and better serve a digital audience.

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Julian Kramer

Julian A. Kramer is the chief experience ambassador at Adobe EMEA, where he works with c-level decision makers on new and prominent digital topics such as AI, marketing automation and corporate innovation culture, and helps them to develop leading customer experiences.